(WFRP) Federal Crop Insurance Overview: Whole-Farm Revenue Protection - Risk Management Agency - Risk Management ...
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Federal Crop Insurance Overview:
Whole-Farm Revenue Protection
(WFRP)
Risk Management Agency 1
What does WFRP cover?
• Revenue from all commodities produced on the farm:
– Including Hemp
– Animals and animal products
– Commodities purchased for resale (up to 50% of total)
– Excluding timber, forest, forest products, and animals for sport,
show, or pets
• Replant costs (with approval)
2
What are the features of WFRP?
• Coverage levels 50-85%
– 5% increments
– Diversification of 3 commodities (commodity count) required
for 80% and 85%
– No catastrophic level of WFRP available
3
What are the features of WFRP?
• Historic revenue is adjusted by:
− Farm expansion
Automatic indexing process accounts for farm growth
historically (Insured may opt out of indexing)
Expanding operations provision allows for up to 35% growth
over historic average, for most operations, with insurance
company approval
• For expanding operations due solely to certified organic
production, the limit on growth is the higher of 35% or $500,000
− History Smoothing Options
Revenue Substitution
Revenue Exclusion
90% Cup on Approved Revenue
4
What are the features of WFRP?
• Costs for market readiness operations may be left in
the approved revenue
– Minimum required to remove commodity from the field and
make market ready
– On farm, in-field, or close proximity to field
– No added value costs may be included
• Other Federal crop insurance policies covering
individual commodities may be purchased
– Must be at buy-up coverage levels
– Any indemnities from these policies will count as revenue
earned under WFRP
5
What are the features of WFRP?
• All farm revenue is insured together under one policy
– Individual commodity losses are not considered, it is the
overall farm revenue that determines losses
• Premium subsidy is available and depends on farm
diversification
– Farms with 2 or more commodities (commodity count) receive
whole-farm premium subsidy
– Farms with 1 commodity receive basic premium subsidy
6
WFRP Premium Subsidy
7
Where is WFRP Available?
• The entire United States…every county!
• The first crop insurance product available nationwide
8
WFRP limits for qualification:
Commodity
Maximum Farm • Covers up to $8.5 million
Coverage Count
Level (Minimum
Approved
Revenue
of revenue
Required)
– Coverage limited to $2 million in
85 3 $10,000,000 expected revenue from animals
80 3 $10,625,000
and animal products, excluding
aquaculture commodities
75 1 $11,333,333
– Coverage limited to $2 million in
70 1 $12,142,857 expected revenue from
greenhouse/nursery, excluding
65 1 $13,067,923
aquaculture commodities
60 1 $14,166,167
Products also insurable under
55 1 $15,454,545 nursery policy
50 1 $17,000,000
Doesn’t include items such as
produce grown in hoop houses
9
What types of farms can benefit from
WFRP?
• Well-suited for:
– Highly diverse farms
– Farms with specialty commodities
– Farms selling to direct markets, specialty markets, regional or
local markets, and farm-identity preserved markets
• Available to all farms or ranches that qualify
• There are some limits for qualification
10How is the amount of insured revenue
determined?
WFRP insured revenue is
the lower of:
• Current year’s expected
revenue (determined on
the farm plan) at the
selected coverage level, or
• The adjusted historic
revenue at the selected
coverage level
11Does diversification matter for WFRP?
Yes!
The number of commodities
produced are counted toward
the diversification requirement
within WFRP
• Each commodity must provide a
calculated percentage of the
expected farm revenue to be
counted
• Commodities providing small
amounts of revenue may be
grouped to meet the qualification
12Does diversification matter for WFRP?
Yes!
The diversification measure
determines eligibility for:
• WFRP
−Potato farms must have 2
commodities
−Commodities insurable with
other revenue coverage must
have 2 commodities
• 80 & 85% coverage levels
−Requires 3 commodities
13Does diversification on the farm matter
for WFRP?
Yes!
The diversification
measure also determines:
– The amount of the
diversification discount to
the premium rate
– Whole-farm premium
subsidy for farms with two
or more commodities
14Other facts to understand about WFRP:
• WFRP covers revenue “produced” in the insurance
period
– A commodity not harvested or sold will count as revenue
– A commodity grown last year and sold this year will not be
covered
– For commodities that grow each year, like cattle, only the
growth for the insurance year counts. (i.e., Calves worth $800
at beginning of the year and to be sold at $2,000, the value
insured will be $1,200)
– Inventories and Accounts Receivable are used to determine
the “produced” amounts
15Other facts to understand about WFRP:
• Prices and yields used to value commodities to be
grown must meet the expected value and yields
guidelines in the policy
– The values must be what producers can reasonably expect to
receive in the local area for the commodity
• Based, to the extent possible, on third party sources
• Marketing contracts used at the time they become effective
within policy limitations
– The yields must be what the producers can reasonably expect
to produce under normal growing conditions
• Based, to the extent possible, on the farm operation’s
production history or other third party sources
16What causes a loss payment under
WFRP?
• Natural causes of loss
and decline in market
price during the insurance
period
• Taxes must be filed for
the policy year before any
claim can be made
• When revenue-to-count
for the policy year is lower
than insured revenue, a
loss payment will be
made
17What information is required?
• Five years of farm tax forms
– For 2022, requires tax forms from 2016-
2020 (calendar & early fiscal year filers)
2015-2019 (late fiscal year filers)
• Exceptions: Veteran/Beginning Farmers or
Ranchers (VFR/BFR) or applicants that
qualified as a VFR/BFR in the previous
year, qualifying persons not required to file
a US Tax Return (i.e., Tribal Entities), and
producers that were physically unable to
farm one year
• Type of tax filer
– Calendar year tax filer
– Early Fiscal year filer (Feb – Aug); and
– Late Fiscal year tax filer (Sept – Dec) 18What information is required?
• Information about what will be
produced on the farm during the
insurance period
– Used to complete the Intended Farm
Operation Report
• Other information as applicable,
such as:
– Supporting records, organic certification,
inventory, or accounts receivable
information
19The WFRP Farm Operation Report
20What is the timeline for WFRP?
• Sales begin upon release of actuarial materials
• Last day to purchase: Sales Closing Date
– Late fiscal year filers (all counties) – Nov 20
– County specific date - Jan 31, Feb 28, or Mar 15
– Intended Farm Operation Report is completed
• Revised Farm Operation Report Due
– Jul 15 for all insureds
21What is the timeline for WFRP?
• Billing date
– Aug 15 for all insureds
• Final Farm Operation Report completed earlier of:
– Time of loss determination; or
– Next Policy Year’s Sales Closing Date
If not completed-limited to 65% coverage the next year
22How do producers buy WFRP protection?
Purchase through a Crop Insurance Agent:
The agent locator tool on RMA’s website:
www.rma.usda.gov/informationtools/agentlocator
23Questions?
www.rma.usda.gov
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